Telford in Shropshire has topped the list of retail locations which are most likely to benefit from lodging an appeal against their business rates, according to the latest data from property consultants, Colliers International.
The research, which looked at 421 centres across the UK, assessed which retail locations have seen the largest increase in vacancy rates between 2008 and 2014 and cross referenced this with those which have seen a significant decrease in rental value during that time. The data has been compiled to highlight the looming deadline set by the Government, whereby businesses must submit business rate appeals by 31st March 2015, or risk losing out on five years’ worth of refunds.
Despite significant investment in recent months to improve the high street, Telford topped the list with a decrease in rental value between 2008 and 2014 of 26%, while vacancy rates in the town increased significantly from 7% in 2008 to 20.5% in 2014.
The Chancellor’s Autumn Statement in December 2014 heralded some major changes for all businesses occupying commercial property in the UK. The Government introduced a deadline of 31 March 2015 for appeals on business rates valuations. The small print however, stated that any claims made after this point would not be eligible for backdated payments prior April 2015. This means that businesses which do not submit claims before the end of March could lose out on five years’ worth of repayments.
Birmingham-based, John Webber, who heads Colliers International’s Rating team, said: “As usual, this will hit the retail sector the hardest. This research is compelling. It isn’t just a smoking gun – it is two smoking barrels of evidence that the VOA needs to act now to reduce the Rateable Values of retail units in those worst affected towns.”
The impact of the recession has been hardest felt outside London with higher vacancy levels and larger falls in rental values being seen in regions across the country, with the exception of London. Between 2008 and 2014, retail rents fell nationally by 14% (excluding London), with retail rents falling by 26% in the Midlands.
John continues: “The last rating revaluation was carried out (for the 2010 listing) in 2008, at the peak of the rental cycle and will last through until the next one which takes place in 2017, following of the deferral of the 2015 revaluation, which was announced in the Chancellor’s Autumn Statement last year. I strongly believe that the postponement of this revaluation – which means that retailers and other businesses continue to pay rates based on pre-recession property values – will decimate those locations hardest hit, and could destroy the high street as result.”
“These findings highlight the pressing need for a more frequent rating revaluation than the current system, which bases business rates on rental growth from up to nine years previously. The time lag between valuations and business rates is too long, particularly as we are already seeing an overheating in certain sectors such as Supermarkets, which will, in 2017 be paying business rates based on rents now and on growth in rents since 2008.”
“Businesses have six weeks left to appeal their business rates, so I urge retail businesses, particularly in Telford to act quickly, if they are to avoid losing out on five years’ worth of repayments.”